Tag Archives: Yihaodian

I suppose I should congratulate Microsoft (Nasdaq: MSFT) for finally realizing the huge potential of e-commerce in China, even though it’s quite late coming to this incredibly competitive space. Then again, no one will ever accuse Microsoft of being a leader in anything these days, as this company is clearly a follower that takes advantage of its dominant PC presence with Windows to force its way into other product and service areas developed by nimbler, more innovative companies. Chinese media are reporting that Microsoft, through its MSN platform, is planning to enter the crowded e-commerce space in China following the recent end of beta testing for its Chinese-language Bing search engine. (English article) The company didn’t provide any details, but it sounds like the new e-commerce platform will be somehow integrated with Bing, as well as Microsoft’s Windows platform that is also the dominant PC operating system in China, similar to the rest of the world. First off, I have to say that I’m amazed that Bing in China is just finishing up its beta testing, as Microsoft launched the site 3 years ago. Clearly it wasn’t fast-tracking Bing in China, which is obvious from the fact that the search engine is still a non-player in the market, similar to its status in the rest of the world despite Microsoft’s putting large resources into this key Internet area dominated by Google (Nasdaq: GOOG) globally and local search leader Baidu (Nasdaq: BIDU) in China. But let’s take a rest from my sarcasm about Bing, and turn my attention instead to this ludicrous new e-commerce initiative. I use the word “ludicrous” not because e-commerce isn’t an area filled with huge potential, but rather because Microsoft will stand little or no chance of success because the space is already so crowded with other much bigger names with far longer histories in the area. In terms of actual numbers, China’s e-commerce market was worth 500 billion yuan in sales in 2010, or nearly $100 billion, and is likely to hit the 1 trillion yuan mark by 2015 if current growth trends continue. But much of that growth has been fueled by a crowded field of both home-grown and international players who will be formidable rivals even for Microsoft. Just to name a few, the former category includes industry leader Alibaba, along with challengers Jingdong Mall, Suning and Dangdang (NYSE: DANG). In the latter category, retail giants Amazon (Nasdaq: AMZN) and Wal-Mart (NYSE: WMT) are both making aggressive pushes in the space, the former with a major expansion of its China website and the latter through its investment in another domestic player called Yihaodian. I’m not saying that entry at this late stage is impossible, as Microsoft does have some advantages that its rivals don’t have. But the lateness of this arrival, combined with the presence of so many well-funded, highly experienced rivals, make me fairly confident in saying that this new e-commerce initiative will ultimately end up a failure.

Bottom line: Microsoft’s new China e-commerce initiative is likely to fail due to its late arrival to the sector where it will face stiff competition from well-funded domestic and international rivals.

Related postings 相关文章:

◙ E-Commerce: Dangdang CFO Goes, Suning’s New Trip 当当网首席财务官请辞 苏宁进军在线旅游业

◙ China: Room for How Many Amazons? 中国电商市场到底有多大？

◙ Dangdang Loss Balloons In E-Commerce Wars 当当网在电子商务大战中亏损严重